Observed and projected changes in potential evapotranspiration (PET) and drought are not well constrained in South Asia. Using five PET estimates (Thornthwaite: PET-TH, Hargreaves-Samani: PET-HS, Penman-Monteith: PET-PM, modified Penman-Monteith: PET-MPM, and Energy: PET-EN) for the observed (1979-2018, from ERA-5) and future warming climate, we show that significant warming has occurred in South Asia during 1979-2018. PET changes show considerable uncertainty depending on the method used. For instance, PET-TH has increased significantly while all the other four methods show a decline in PET in the majority of South Asia during the observed period of 1979-2018. The increase in PET-TH is substantially higher than PET-HS, PET-PM, and PET-MPM due to a higher (three to four times) sensitivity of PET-TH to warming during the observed period. Under the 1.5, 2.0, and 2.5°C warming worlds, Coupled Model Intercomparison Project Phase 5 Global Climate Models (CMIP5-GCMs) project increase in PET and drought frequency over the majority of the regions. Drought estimates based on PET-EN and PET-MPM are consistent with soil moisture-based drought estimates and project a substantial increase in the frequency of severe droughts under warming climate in South Asia. In addition, the projected frequency of severe drought based on PET-TH, which is an outlier, is about five times higher than PET-EN and PET-MPM. Methods to estimate PET contribute the most in the overall uncertainty of PET and drought projections in South Asia, primarily due to PET-TH. Drought estimates based on PET-TH are not reliable for the observed and projected future climate. Therefore, future drought projections should be either based on PET-EN/PET-MPM or soil moisture.